Bill Text: CA SB245 | 2015-2016 | Regular Session | Introduced
Bill Title: Automobile insurance: underinsured motorist coverage.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2016-02-01 - Returned to Secretary of Senate pursuant to Joint Rule 56. [SB245 Detail]
Download: California-2015-SB245-Introduced.html
BILL NUMBER: SB 245 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Roth
FEBRUARY 18, 2015
An act to amend Section 11580.2 of the Insurance Code, relating to
automobile insurance.
LEGISLATIVE COUNSEL'S DIGEST
SB 245, as introduced, Roth. Automobile insurance: underinsured
motorist coverage.
Existing law prohibits a policy of bodily injury liability
insurance covering liability arising out of the ownership,
maintenance, or use of any motor vehicle from being issued or
delivered in this state to the owner or operator of a motor vehicle,
or from being issued or delivered by any insurer licensed in this
state upon any motor vehicle then principally used or principally
garaged in this state, unless the policy contains, or has added to it
by endorsement, a provision with specified coverage limits insuring
the insured, the insured's heirs, or legal representative for all
sums within the limits that he, she, or they are legally entitled to
recover as damages for bodily injury or wrongful death from the owner
or operator of an uninsured motor vehicle, except as otherwise
provided. Uninsured motorist coverage includes underinsured motorist
coverage.
This bill would make technical, nonsubstantive changes to these
provisions.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 11580.2 of the Insurance Code is amended to
read:
11580.2. (a) (1) No policy of bodily injury liability insurance
covering liability arising out of the ownership, maintenance, or use
of any motor vehicle, except for policies that provide insurance in
the Republic of Mexico issued or delivered in this state by
nonadmitted Mexican insurers, shall be issued or delivered in this
state to the owner or operator of a motor vehicle, or shall be issued
or delivered by any insurer licensed in this state upon any motor
vehicle then principally used or principally garaged in this state,
unless the policy contains, or has added to it by endorsement, a
provision with coverage limits at least equal to the limits specified
in subdivision (m) and in no case less than the financial
responsibility requirements specified in Section 16056 of the Vehicle
Code insuring the insured, the insured's heirs , or legal
representative for all sums within the limits that he, she, or they,
as the case may be, shall be legally entitled to recover as damages
for bodily injury or wrongful death from the owner or operator of an
uninsured motor vehicle. The insurer and any named insured, prior to
or subsequent to the issuance or renewal of a policy, may, by
agreement in writing, in the form specified in paragraph (2) or
paragraph (3), (1) (A) delete the
provision covering damage caused by an uninsured motor vehicle
completely, or (2) (B) delete the
coverage when a motor vehicle is operated by a natural person or
persons designated by name, or (3) (C)
agree to provide the coverage in an amount less than that required by
subdivision (m) but not less than the financial responsibility
requirements specified in Section 16056 of the Vehicle Code. Any of
these agreements by any named insured or agreement for the amount of
coverage shall be binding upon every insured to whom the policy or
endorsement provisions apply while the policy is in force, and shall
continue to be so binding with respect to any continuation or renewal
of the policy or with respect to any other policy that extends,
changes, supersedes, or replaces the policy issued to the named
insured by the same insurer, or with respect to reinstatement of the
policy within 30 days of any lapse thereof. A policy shall be
excluded from the application of this section if the automobile
liability coverage is provided only on an excess or umbrella basis.
Nothing in this section shall require that uninsured motorist
coverage be offered or provided in any homeowner policy, personal and
residents' liability policy, comprehensive personal liability
policy, manufacturers' and contractors' policy, premises liability
policy, special multiperil policy, or any other policy or endorsement
where when automobile liability
coverage is offered as incidental to some other basic coverage,
notwithstanding that the policy may provide automobile or motor
vehicle liability coverage on insured premises or the ways
immediately adjoining.
(2) The agreement specified in paragraph (1) to delete the
provision covering damage caused by an uninsured motor vehicle
completely or delete the coverage when a motor vehicle is operated by
a natural person or persons designated by name shall be in the
following form:
"The California Insurance Code requires an insurer to provide
uninsured motorists coverage in each bodily injury liability
insurance policy it issues covering liability arising out of the
ownership, maintenance, or use of a motor vehicle. Those provisions
also permit the insurer and the applicant to delete the coverage
completely or to delete the coverage when a motor vehicle is operated
by a natural person or persons designated by name. Uninsured
motorists coverage insures the insured, his or her heirs, or legal
representatives for all sums within the limits established by law,
that the person or persons are legally entitled to recover as damages
for bodily injury, including any resulting sickness, disease, or
death, to the insured from the owner or operator of an uninsured
motor vehicle not owned or operated by the insured or a resident of
the same household. An uninsured motor vehicle includes an
underinsured motor vehicle as defined in subdivision (p) of Section
11580.2 of the Insurance Code."
The agreement may contain additional statements not in derogation
of or in conflict with the foregoing. The execution of the agreement
shall relieve the insurer of liability under this section while the
agreement remains in effect.
(3) The agreement specified in paragraph (1) to provide coverage
in an amount less than that required by subdivision (m) shall be in
the following form:
"The California Insurance Code requires an insurer to provide
uninsured motorists coverage in each bodily injury liability
insurance policy it issues covering liability arising out of the
ownership, maintenance, or use of a motor vehicle. Those provisions
also permit the insurer and the applicant to agree to provide the
coverage in an amount less than that required by subdivision (m) of
Section 11580.2 of the Insurance Code but not less than the financial
responsibility requirements. Uninsured motorists coverage insures
the insured, his or her heirs, or legal representatives for all sums
within the limits established by law, that the person or persons are
legally entitled to recover as damages for bodily injury, including
any resulting sickness, disease, or death, to the insured from the
owner or operator of an uninsured motor vehicle not owned or operated
by the insured or a resident of the same household. An uninsured
motor vehicle includes an underinsured motor vehicle as defined in
subdivision (p) of Section 11580.2 of the Insurance Code."
The agreement may contain additional statements not in derogation
of or in conflict with this paragraph. However, it shall be presumed
that an application for a policy of bodily injury liability insurance
containing uninsured motorist coverage in an amount less than that
required by subdivision (m), signed by the named insured and approved
by the insurer, with a policy effective date after January 1, 1985,
shall be a valid agreement as to the amount of uninsured motorist
coverage to be provided.
(b) As used in subdivision (a), "bodily injury" includes sickness
or disease, including death, resulting therefrom; "named insured"
means only the individual or organization named in the declarations
of the policy of motor vehicle bodily injury liability insurance
referred to in subdivision (a); as used in subdivision (a) if the
named insured is an individual "insured" means the named insured and
the spouse of the named insured and, while residents of the same
household, relatives of either while occupants of a motor vehicle or
otherwise, heirs and any other person while in or upon or entering
into or alighting from an insured motor vehicle and any person with
respect to damages he or she is entitled to recover for care or loss
of services because of bodily injury to which the policy provisions
or endorsement apply; as used in subdivision (a), if the named
insured is an entity other than an individual, "insured" means any
person while in or upon or entering into or alighting from an insured
motor vehicle and any person with respect to damages he or she is
entitled to recover for care or loss of services because of bodily
injury to which the policy provisions or endorsement apply. As used
in this subdivision, "individual" shall not include persons doing
business as corporations, partnerships, or associations. As used in
this subdivision, "insured motor vehicle" means the motor vehicle
described in the underlying insurance policy of which the uninsured
motorist endorsement or coverage is a part, a temporary substitute
automobile for which liability coverage is provided in the policy or
a newly acquired automobile for which liability coverage is provided
in the policy if the motor vehicle is used by the named insured or
with his or her permission or consent, express or implied, and any
other automobile not owned by or furnished for the regular use of the
named insured or any resident of the same household, or by a natural
person or persons for whom coverage has been deleted in accordance
with subdivision (a) while being operated by the named insured or his
or her spouse if a resident of the same household, but "insured
motor vehicle" shall not include any automobile while used as a
public or livery conveyance. As used in this section, "uninsured
motor vehicle" means a motor vehicle with respect to the ownership,
maintenance or use of which there is no bodily injury liability
insurance or bond applicable at the time of the accident, or there is
the applicable insurance or bond but the company writing the
insurance or bond denies coverage thereunder or refuses to admit
coverage thereunder except conditionally or with reservation, or an
"underinsured motor vehicle" as defined in subdivision (p), or a
motor vehicle used without the permission of the owner thereof if
there is no bodily injury liability insurance or bond applicable at
the time of the accident with respect to the owner or operator
thereof, or the owner or operator thereof be unknown, provided that,
with respect to an "uninsured motor vehicle" whose owner or operator
is unknown:
(1) The bodily injury has arisen out of physical contact of the
automobile with the insured or with an automobile that the insured is
occupying.
(2) The insured or someone on his or her behalf has reported the
accident within 24 hours to the police department of the city where
the accident occurred or, if the accident occurred in unincorporated
territory then either to the sheriff of the county where the accident
occurred or to the local headquarters of the California Highway
Patrol, and has filed with the insurer within 30 days thereafter a
statement under oath that the insured or his or her legal
representative has or the insured's heirs have a cause of action
arising out of the accident for damages against a person or persons
whose identity is unascertainable and set forth facts in support
thereof. As used in this section, "uninsured motor vehicle" shall not
include a motor vehicle owned or operated by the named insured or
any resident of the same household or self-insured within the meaning
of the Financial Responsibility Law of the state in which the motor
vehicle is registered or that is owned by the United States of
America, Canada, a state or political subdivision of any of those
governments or an agency of any of the foregoing, or a land motor
vehicle or trailer while located for use as a residence or premises
and not as a vehicle, or any equipment or vehicle designed or
modified for use primarily off public roads, except while actually
upon public roads.
As used in this section, "uninsured motor vehicle" also means an
insured motor vehicle where when the
liability insurer thereof is unable to make payment with respect to
the legal liability of its insured within the limits specified
therein because of insolvency. An insurer's solvency protection shall
be applicable only to accidents occurring during a policy period in
which its insured's motor vehicle coverage is in effect
where when the liability insurer of the
tortfeasor becomes insolvent within one year of the accident. In the
event of payment to any person under the coverage required by this
section and subject to the terms and conditions of the coverage, the
insurer making the payment, shall to the extent thereof, be entitled
to any proceeds that may be recoverable from the assets of the
insolvent insurer through any settlement or judgment of the person
against the insolvent insurer.
Nothing in this section is intended to exclude from the definition
of an uninsured motor vehicle any motorcycle or private
passenger-type four-wheel drive motor vehicle if that vehicle was
subject to and failed to comply with the Financial Responsibility Law
of this state.
(c) The insurance coverage provided for in this section does not
apply either as primary or as excess coverage:
(1) To property damage sustained by the insured.
(2) To bodily injury of the insured while in or upon or while
entering into or alighting from a motor vehicle other than the
described motor vehicle if the owner thereof has insurance similar to
that provided in this section.
(3) To bodily injury of the insured with respect to which the
insured or his or her representative shall, without the written
consent of the insurer, make any settlement with or prosecute to
judgment any action against any person who may be legally liable
therefor.
(4) In any instance where when it
would inure directly or indirectly to the benefit of any workers'
compensation carrier or to any person qualified as a self-insurer
under any workers' compensation law, or directly to the benefit of
the United States, or any state or any political subdivision thereof.
(5) To establish proof of financial responsibility as provided in
Section 16054 of the Vehicle Code.
(6) To bodily injury of the insured while occupying a motor
vehicle owned by an insured or leased to an insured under a written
contract for a period of six months or longer, unless the occupied
vehicle is an insured motor vehicle. "Motor vehicle" as used in this
paragraph means any self-propelled vehicle.
(7) To bodily injury of the insured when struck by a vehicle owned
by an insured, except when the injured insured's vehicle is being
operated, or caused to be operated, by a person without the injured
insured's consent in connection with criminal activity that has been
documented in a police report and that the injured insured is not a
party to.
(8) To bodily injury of the insured while occupying a motor
vehicle rented or leased to the insured for public or livery
purposes.
(d) Subject to paragraph (2) of subdivision (c), the policy or
endorsement may provide that if the insured has insurance available
to the insured under more than one uninsured motorist coverage
provision, any damages shall not be deemed to exceed the higher of
the applicable limits of the respective coverages, and the damages
shall be prorated between the applicable coverages as the limits of
each coverage bear to the total of the limits.
(e) The policy or endorsement added thereto may provide that if
the insured has valid and collectible automobile medical payment
insurance available to him or her, the damages that the insured shall
be entitled to recover from the owner or operator of an uninsured
motor vehicle shall be reduced for purposes of uninsured motorist
coverage by the amounts paid or due to be paid under the automobile
medical payment insurance.
(f) The policy or an endorsement added thereto shall provide that
the determination as to whether the insured shall be legally entitled
to recover damages, and if so entitled, the amount thereof, shall be
made by agreement between the insured and the insurer or, in the
event of disagreement, by arbitration. The arbitration shall be
conducted by a single neutral arbitrator. An award or a judgment
confirming an award shall not be conclusive on any party in any
action or proceeding between (i) the insured, his or her insurer, his
or her legal representative, or his or her heirs and (ii) the
uninsured motorist to recover damages arising out of the accident
upon which the award is based. If the insured has or may have rights
to benefits, other than nonoccupational disability benefits, under
any workers' compensation law, the arbitrator shall not proceed with
the arbitration until the insured's physical condition is stationary
and ratable. In those cases in which the insured claims a permanent
disability, the claims shall, unless good cause be shown, be
adjudicated by award or settled by compromise and release before the
arbitration may proceed. Any demand or petition for arbitration shall
contain a declaration, under penalty of perjury, stating whether (i)
the insured has a workers' compensation claim; (ii) the claim has
proceeded to findings and award or settlement on all issues
reasonably contemplated to be determined in that claim; and (iii) if
not, what reasons amounting to good cause are grounds for the
arbitration to proceed immediately. The arbitration shall be deemed
to be a proceeding and the hearing before the arbitrator shall be
deemed to be the trial of an issue therein for purposes of issuance
of a subpoena by an attorney of a party to the arbitration under
Section 1985 of the Code of Civil Procedure. Title 4 (commencing with
Section 2016.010) of Part 4 of the Code of Civil Procedure shall be
applicable to these determinations, and all rights, remedies,
obligations, liabilities and procedures set forth in Title 4
(commencing with Section 2016.010) of Part 4 of the Code of Civil
Procedure shall be available to both the insured and the insurer at
any time after the accident, both before and after the commencement
of arbitration, if any, with the following limitations:
(1) Whenever in Title 4 (commencing with Section 2016.010) of Part
4 of the Code of Civil Procedure, reference is made to the court in
which the action is pending, or provision is made for application to
the court or obtaining leave of court or approval by the court, the
court that shall have jurisdiction for the purposes of this section
shall be the superior court of the State of California, in and for
any county that is a proper county for the filing of a suit for
bodily injury arising out of the accident, against the uninsured
motorist, or any county specified in the policy or an endorsement
added thereto as a proper county for arbitration or action thereon.
(2) Any proper court to which application is first made by either
the insured or the insurer under Title 4 (commencing with Section
2016.010) of Part 4 of the Code of Civil Procedure for any discovery
or other relief or remedy, shall thereafter be the only court to
which either of the parties shall make any applications under Title 4
(commencing with Section 2016.010) of Part 4 of the Code of Civil
Procedure with respect to the same accident, subject, however, to the
right of the court to grant a change of venue after a hearing upon
notice, upon any of the grounds upon which change of venue might be
granted in an action filed in the superior court.
(3) A deposition pursuant to Chapter 9 (commencing with Section
2025.010) of Title 4 of Part 4 of the Code of Civil Procedure may be
taken without leave of court, except that leave of court, granted
with or without notice and for good cause shown, must be obtained if
the notice of the taking of the deposition is served by either party
within 20 days after the accident.
(4) Subdivision (a) of Section 2025.280 of the Code of Civil
Procedure is not applicable to discovery under this section.
(5) For the purposes of discovery under this section, the insured
and the insurer shall each be deemed to be "a party to the action,"
where when that phrase is used in
Section 2025.260 of the Code of Civil Procedure.
(6) Interrogatories under Chapter 13 (commencing with Section
2030.010) of Title 4 of Part 4 of the Code of Civil Procedure and
requests for admission under Chapter 16 (commencing with Section
2033.010) of Title 4 of Part 4 of the Code of Civil Procedure may be
served by either the insured or the insurer upon the other at any
time more than 20 days after the accident without leave of court.
(7) Nothing in this section limits the rights of any party to
discovery in any action pending or that may hereafter be pending in
any court.
(g) The insurer paying a claim under an uninsured motorist
endorsement or coverage shall be entitled to be subrogated to the
rights of the insured to whom the claim was paid against any person
legally liable for the injury or death to the extent that payment was
made. The action may be brought within three years from the date
that payment was made hereunder.
(h) An insured entitled to recovery under the uninsured motorist
endorsement or coverage shall be reimbursed within the conditions
stated herein without being required to sign any release or waiver of
rights to which he or she may be entitled under any other insurance
coverage applicable; nor shall payment under this section to the
insured be delayed or made contingent upon the decisions as to
liability or distribution of loss costs under other bodily injury
liability insurance or any bond applicable to the accident. Any loss
payable under the terms of the uninsured motorist endorsement or
coverage to or for any person may be reduced:
(1) By the amount paid and the present value of all amounts
payable to him or her, his or her executor, administrator, heirs, or
legal representative under any workers' compensation law, exclusive
of nonoccupational disability benefits.
(2) By the amount the insured is entitled to recover from any
other person insured under the underlying liability insurance policy
of which the uninsured motorist endorsement or coverage is a part,
including any amounts tendered to the insured as advance payment on
behalf of the other person by the insurer providing the underlying
liability insurance.
(i) (1) No cause of action shall accrue to the insured under any
policy or endorsement provision issued pursuant to this section
unless one of the following actions have been taken within two years
from the date of the accident:
(A) Suit for bodily injury has been filed against the uninsured
motorist, in a court of competent jurisdiction.
(B) Agreement as to the amount due under the policy has been
concluded.
(C) The insured has formally instituted arbitration proceedings by
notifying the insurer in writing sent by certified mail, return
receipt requested. Notice shall be sent to the insurer or to the
agent for process designated by the insurer filed with the
department.
(2) Any arbitration instituted pursuant to this section shall be
concluded either:
(A) Within five years from the institution of the arbitration
proceeding.
(B) If the insured has a workers' compensation claim arising from
the same accident, within three years of the date the claim is
concluded, or within the five-year period set forth in subparagraph
(A), whichever occurs later.
(3) The doctrines of estoppel, waiver, impossibility,
impracticality, and futility apply to excuse a party's noncompliance
with the statutory timeframe, as determined by the court.
(4) Parties to the insurance contract may stipulate in writing to
extending the time to conclude arbitration.
(j) Notwithstanding subdivisions (b) and (i), in the event the
accident occurs in any other state or foreign jurisdiction to which
coverage is extended under the policy and the insurer of the
tortfeasor becomes insolvent, any action authorized pursuant to this
section may be maintained within three months of the insolvency of
the tortfeasor's insurer, but in no event later than the pertinent
period of limitation of the jurisdiction in which the accident
occurred.
(k) Notwithstanding subdivision (i), any insurer whose insured has
made a claim under his or her uninsured motorist coverage, and the
claim is pending, shall, at least 30 days before the expiration of
the applicable statute of limitation, notify its insured in writing
of the statute of limitation applicable to the injury or death.
Failure of the insurer to provide the written notice shall operate to
toll any applicable statute of limitation or other time limitation
for a period of 30 days from the date the written notice is actually
given. The notice shall not be required if the insurer has received
notice that the insured is represented by an attorney.
( l ) As used in subdivision (b), "public or livery
conveyance," or terms of similar import, shall not include the
operation or use of a motor vehicle by the named insured in the
performance of volunteer services for a nonprofit charitable
organization or governmental agency by providing social service
transportation as defined in subdivision (f) of Section 11580.1. This
subdivision shall apply only to policies of insurance issued,
amended, or renewed on or after January 1, 1976.
(m) Coverage provided under an uninsured motorist endorsement or
coverage shall be offered with coverage limits equal to the limits of
liability for bodily injury in the underlying policy of insurance,
but shall not be required to be offered with limits in excess of the
following amounts:
(1) A limit of thirty thousand dollars ($30,000) because of bodily
injury to or death of one person in any one accident.
(2) Subject to the limit for one person set forth in paragraph
(1), a limit of sixty thousand dollars ($60,000) because of bodily
injury to or death of two or more persons in any one accident.
(n) Underinsured motorist coverage shall be offered with limits
equal to the limits of liability for the insured's uninsured motorist
limits in the underlying policy, and may be offered with limits in
excess of the uninsured motorist coverage. For the purposes of this
section, uninsured and underinsured motorist coverage shall be
offered as a single coverage. However, an insurer may offer coverage
for damages for bodily injury or wrongful death from the owner or
operator of an underinsured motor vehicle at greater limits than an
uninsured motor vehicle.
(o) If an insured has failed to provide an insurer with wage loss
information or medical treatment record releases within 15 days of
the insurer's request or has failed to submit to a medical
examination arranged by the insurer within 20 days of the insurer's
request, the insurer may, at any time prior to 30 days before the
actual arbitration proceedings commence, request, and the insured
shall furnish, wage loss information or medical treatment record
releases, and the insurer may require the insured, except during
periods of hospitalization, to make himself or herself available for
a medical examination. The wage loss information or medical treatment
record releases shall be submitted by the insured within 10 days of
request and the medical examination shall be arranged by the insurer
no sooner than 10 days after request, unless the insured agrees to an
earlier examination date, and not later than 20 days after the
request. If the insured fails to comply with the requirements of this
subdivision, the actual arbitration proceedings shall be stayed for
at least 30 days following compliance by the insured. The proceedings
shall be scheduled as soon as practicable following expiration of
the 30-day period.
(p) This subdivision applies only when bodily injury, as defined
in subdivision (b), is caused by an underinsured motor vehicle. If
the provisions of this subdivision conflict with
subdivisions (a) through (o),
inclusive, the provisions of this subdivision shall prevail.
(1) As used in this subdivision, "an insured motor vehicle" is one
that is insured under a motor vehicle liability policy, or
automobile liability insurance policy, self-insured, or for which a
cash deposit or bond has been posted to satisfy a financial
responsibility law.
(2) "Underinsured motor vehicle" means a motor vehicle that is an
insured motor vehicle but insured for an amount that is less than the
uninsured motorist limits carried on the motor vehicle of the
injured person.
(3) This coverage does not apply to any bodily injury until the
limits of bodily injury liability policies applicable to all insured
motor vehicles causing the injury have been exhausted by payment of
judgments or settlements, and proof of the payment is submitted to
the insurer providing the underinsured motorist coverage.
(4) When bodily injury is caused by one or more motor vehicles,
whether insured, underinsured, or uninsured, the maximum liability of
the insurer providing the underinsured motorist coverage shall not
exceed the insured's underinsured motorist coverage limits, less the
amount paid to the insured by or for any person or organization that
may be held legally liable for the injury.
(5) The insurer paying a claim under this subdivision shall, to
the extent of the payment, be entitled to reimbursement or credit in
the amount received by the insured from the owner or operator of the
underinsured motor vehicle or the insurer of the owner or operator.
(6) If the insured brings an action against the owner or operator
of an underinsured motor vehicle, he or she shall forthwith give to
the insurer providing the underinsured motorist coverage a copy of
the complaint by personal service or certified mail. All pleadings
and depositions shall be made available for copying or copies
furnished the insurer, at the insurer's expense, within a reasonable
time.
(7) Underinsured motorist coverage shall be included in all
policies of bodily injury liability insurance providing uninsured
motorist coverage issued or renewed on or after July 1, 1985.
Notwithstanding this section, an agreement to delete uninsured
motorist coverage completely, or with respect to a person or persons
designated by name, executed prior to July 1, 1985, shall remain in
full force and effect.
(q) Regardless of the number of vehicles involved whether insured
or not, persons covered, claims made, premiums paid , or
the number of premiums shown on the policy, in no event shall the
limit of liability for two or more motor vehicles or two or more
policies be added together, combined, or stacked to determine the
limit of insurance coverage available to injured persons.
